Asked by Jamie Flexer on May 01, 2024
Verified
Wedge Corporation has the following capital stock outstanding:
$1 par value common stock,250,000 shares.
8% preferred stock,par $100,5,000 shares,cumulative,with 2 years in arrears.
Cash dividends of $150,000 were declared and paid near the end of the current year.
A.Calculate the dividends paid to the preferred stockholders.
B.Calculate the dividends paid to the common stockholders.
Cumulative
Refers to the aggregate amount that has been gathered or accumulated over time.
Par Value
A nominal or face value assigned to a share of stock or a bond by the issuing company, often unrelated to its market value.
Common Stock
A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.
- Determine the dividends paid to different types of stockholders under various conditions.
Verified Answer
ZK
Zybrea KnightMay 08, 2024
Final Answer :
A.Preferred: (5,000 shares × $100 par × 8%)× 3 years = $120,000.
B.Common: Total dividends $150,000 - dividends to preferred stockholders $120,000 = dividends paid to common stockholders $30,000.
B.Common: Total dividends $150,000 - dividends to preferred stockholders $120,000 = dividends paid to common stockholders $30,000.
Learning Objectives
- Determine the dividends paid to different types of stockholders under various conditions.